Deals lift Microsoft to record job growth

Here’s an advance look at a story I wrote for Friday’s newspaper. — tb

Bolstered by big acquisitions, Microsoft Corp. has set a company growth record — adding a net total of more than 11,200 employees to its worldwide ranks this fiscal year.

And it’s not over yet.

Microsoft had 89,809 employees worldwide as of the end of May, a company spokesman said Thursday. That compares with 78,565 in June 2007, the end of its previous fiscal year.

That works out to the biggest annual growth in the company’s history — even before the current fiscal year concludes at the end of this month. The past record was in 2006, when Microsoft added about 10,000 employees.

However, much of the growth in the past year came from Microsoft’s acquisition of Seattle-based digital advertising company aQuantive, which employed about 2,600 people worldwide. Without that deal, Microsoft would have added about 8,600 people globally in the past 11 months – still 1,600 more than the 2007 annual growth, but below the company’s 2006 growth record.

The company also made smaller acquisitions over the past year that, combined, added noticeably to the total. Examples include Norway’s Fast Search & Transfer and Seattle’s Farecast. Microsoft was unsuccessful in its attempt to acquire Yahoo, which has about 14,000 employees.

Microsoft’s employment figures are watched closely by regional economists, as a barometer of the local technology employment market. In the Seattle region, the company added a net total of 3,346 employees in the past 11 months, bringing the total to 38,856 at the end of May.

But that, too, was inflated by Microsoft’s purchase of aQuantive, which employed about 600 people in the Seattle region.

Without the local aQuantive workers, Microsoft would have added a net total of about 2,700 employees in the Seattle region – more than it grew locally last year, but not as much as in 2006. The record year for Microsoft’s employment growth in the Seattle region remains 2000 – at the height of the technology boom – when the company added nearly 4,500 employees locally.

To accommodate all the workers, Microsoft has been expanding its Redmond campus, and it has signed a series of leases in Bellevue that will make the company that city’s largest employer. Microsoft has also leased new spaces in the past year in Seattle’s South Lake Union and Pioneer Square neighborhoods.

A report Thursday in the Seattle Daily Journal of Commerce, citing two unnamed sources, said the company is now seeking an additional 350,000 square feet of space in downtown Seattle, potentially giving Microsoft room for 1,750 employees.

Microsoft spokesman Lou Gellos declined to comment on those numbers but confirmed that the company is exploring the possibility of occupying more space in the city: “We’re always looking for opportunities in real estate, and we are looking around now to see what space is available in Seattle,” he said.